APY Calculator United States

This APY calculator converts a nominal rate and compounding frequency into APY, the yield you actually earn, and projects a deposit's growth.

What it does

The APY Calculator converts a nominal (stated) interest rate and a compounding frequency into the annual percentage yield (APY), the effective yearly return once compounding is included, and projects a deposit forward to show the ending balance and interest earned.

Data sources & parameters

This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

The formula

APY = (1 + r ÷ m)^m − 1, where r is the nominal rate and m the compounding periods per year; balance = principal × (1 + r ÷ m)^(m × years).

How it works

It divides the nominal rate by the number of compounding periods in a year, compounds it over those periods to find the effective annual yield, then grows the deposit at that rate over the years you enter.

Where it is used

Comparing savings accounts and CDs with different compounding
Turning a bank's stated rate into the yield you actually earn
Projecting how a deposit grows over several years

Worked example

A 5% nominal rate compounded monthly gives an APY of …. A $10,000.00 deposit over 1 year grows to …, earning … in interest.

What the APY calculator does

The APY calculator converts a nominal (stated) interest rate and a compounding frequency into the annual percentage yield, the effective yearly return on a deposit. It also projects a deposit forward over a chosen number of years and shows the ending balance and the interest earned. Banks and credit unions advertise savings accounts and certificates of deposit by APY because it includes compounding, and the tool lets you check and compare those figures.

APY is the savings counterpart of APR: APR measures the yearly cost of a loan including fees, and APY measures the yearly return on a deposit including compounding.

How compounding creates yield

When a bank credits interest monthly, the balance grows a little each month, and the next month’s interest is calculated on that larger balance. Over a year the total earned is more than the nominal rate applied once, and the APY measures that difference.

Daily compounding credits interest 365 times a year, monthly 12 times, quarterly four times, and annual compounding once. More frequent compounding gives a higher APY for the same nominal rate, but the gain shrinks as frequency rises: going from annual to monthly adds more than going from monthly to daily.

How the calculation works

It divides the nominal rate by the number of compounding periods in a year.
It compounds that periodic rate over a full year to find the effective annual yield.
It grows the deposit at the periodic rate over the number of periods in your chosen term.
It subtracts the original deposit from the ending balance to show the interest earned.

The same formula applies to any interest-bearing deposit, from a high-yield savings account to a multi-year certificate of deposit.

Why APY is the fair comparison

An account compounded daily pays slightly more over a year than the same nominal rate compounded annually, and comparing nominal rates would miss that. Regulators require deposit products to disclose APY so that savers are not misled by a headline rate with less frequent compounding. When you shop for a savings account or certificate of deposit, compare APYs.

Reading your result

The calculator shows the APY first, then the ending balance and the interest earned for the deposit and term you entered. With annual compounding the APY equals the nominal rate. Switching to monthly or daily raises the APY slightly above the rate, and the interest earned rises with it.

What you need to enter

The nominal annual interest rate the account quotes.
How often the account compounds interest.
The amount you plan to deposit.
The number of years you expect to keep the money invested.

The deposit and term drive the ending balance, while the rate and compounding frequency drive the APY. When comparing accounts, keep the deposit and term the same and change only the rate and frequency.

APY, inflation, and taxes

The yield tells you how fast the balance grows in dollars, but inflation reduces what those dollars buy. If an account pays less than the inflation rate, the balance grows on paper and buys less than before, so compare the APY with current inflation to judge the real return.

Interest from savings accounts and certificates of deposit is generally taxable, so your after-tax yield is lower than the advertised APY. The calculator projects the pre-tax balance and interest, which is the right basis for comparing accounts, but what you keep depends on your tax situation. The projection also assumes a fixed rate for the whole term, while variable-rate accounts can change.

This is general information only and not financial advice.

About This APY Calculator

Use this APY calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.

Frequently asked questions

What is APY?

APY, or annual percentage yield, is the effective yearly return on a deposit once compounding is taken into account. It is what you earn over a year, as opposed to the stated rate.

How is APY different from the nominal rate?

The nominal rate is the stated annual rate before compounding. APY includes interest earned on interest during the year, so it is equal to or higher than the nominal rate.

How does compounding frequency affect APY?

The more often interest compounds, the higher the APY for the same nominal rate. Daily compounding yields slightly more than monthly, which yields more than annual compounding.

When does APY equal the nominal rate?

When interest compounds only once a year. With annual compounding there is no compounding within the year, so the APY and the nominal rate are the same.

Why compare accounts on APY instead of the rate?

APY includes compounding, so two accounts with the same nominal rate but different compounding schedules can be compared on one figure.

Is my data private?

Yes. The calculation runs entirely in your browser, so nothing you enter is uploaded, stored, or shared.

About the author

Written and reviewed by

Taha Kheirandish

Economics student and independent researcher

Taha Kheirandish reads tax codes the way other people read maps — to find out where a system actually leads, not where it claims to go.

He is an economics student, and his work here is comparative by design. A pension deferral bonus in Quebec, a commuting allowance in Germany, a rent-increase ceiling in the Netherlands: each is a decision a government made about how money should move, and each reads differently once you set it beside eight others. He builds and checks these calculators across nine markets from primary sources — the regulation rather than a summary of it, the ministry’s own circular rather than a news item quoting it.

That is the editorial standard of the site as well as his habit. Every rate, threshold and bracket here carries the document it was read from and the date it takes effect, and gets re-checked when the law moves rather than when someone happens to notice.

He is a researcher, not a licensed adviser, and nothing on this site is personal financial advice. It is arithmetic done carefully with its sources shown — so that you can check it, and take it to someone who is.

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